Where to find current TIPS rates?

Gearhead Jim · 01-29-2008, 05:12 PM

Right now, I don't have any TIPS. When the interest rate gets to around 2.5%, then I'll start to stock up. But where can I find today's rates for TIPS? Treasury Direct will tell me the rates at the previous auctions, but not what the current yield is in the secondary market. There's gotta be a website, right?

Or should I disregard the secondary market and just wait for the auctions? But how do I know if the auction rates make them attractive, until after the auction?

A TIPS bond fund would be convenient, but I'm thinking there is a continual reinvestment rate risk that can be avoided by just buying the bonds themselves.

I'm kicking myself for not buying a bunch when the rates were up in 2007.

Further advice or information?

haha · 01-29-2008, 05:36 PM

Quote:

Originally Posted by Gearhead Jim

Right now, I don't have any TIPS. When the interest rate gets to around 2.5%, then I'll start to stock up. But where can I find today's rates for TIPS?

Bloomberg.

Bloomberg.com: Rates & Bonds

Gearhead Jim · 01-29-2008, 06:33 PM

Thanks. Further comment is still welcome.

saluki9 · 01-29-2008, 08:05 PM

Quote:

Originally Posted by Gearhead Jim

Thanks. Further comment is still welcome.

Not really, Haha has given you the best (free) place to look

As for when to buy I agree you should wait for a bigger spread. I suggest only buying these in a deferred account. If you can afford the actual bonds go ahead, but if you're dealing with less than say $50K you should just buy an inexpensive TIPS fund

Gearhead Jim · 01-29-2008, 08:09 PM

Quote:

Originally Posted by saluki9

Not really, Haha has given you the best (free) place to look

The website he linked is perfect, thanks.
I was wondering if anyone had further comment about buying at auction vs secondary market, TIPS funds vs actual TIPS, etc.

Maurice · 01-30-2008, 04:31 AM

Jim - a couple of comments - the rates on Bloomberg the day before the auction closes are a reasonably good predictor of the auction results. However, it is a real live (dutch) auction, so the rates aren't exactly what you see in the 2ndary market the day before.

As people point out the yields on TIPs are low right now. Its far from clear if and when they'll move back up though - its certainly possible that the market has experienced a fundamental shift in inflation expectations that could last for some time.

I participated in last weeks auction of 20yrs, and will continue to do so annually. I'm trying to build my own inflation-protected annuity of sorts. I am 39 1/2, so am exactly 20 years away from being able to withdraw from my IRA without penalty. My intention is to buy enough TIPs every year to give me ~60k a year in income (in 2008 dollars) starting when I'm 59 1/2. I figure some years I'll be buying in favorable TIPS markets, in other years less so. But for me this is part of a larger plan so I'm not worrying too much about timing.

Re auction vs. secondary - in my experience the 2ndary market for retail investors sucks, but I admit I haven't done too much research lately. You can participate in treasury auctions for free at treasurydirect, or for a nominal fee or even free at some brokers. Fido for example doesn't charge for treasury auctions (although they rape you if you want to buy a vanguard fund). My IRA is through etrade, where the auctions cost me $40.

Re funds vs. individual bonds, there's plenty written on that here and the TIPS angle probably doesn't change the arguments on either side. For me it makes sense to buy the bonds directly, given my larger plan. Basically, over the next 20 years I'll be building a portfolio of around 1M face in TIPS, and its only going to cost me $40 per year (assuming etrade's auction fee remains constant). Clearly thats far less than a fund will cost me.

JohnEyles · 01-30-2008, 12:16 PM

Quote:

Originally Posted by Gearhead Jim

Thanks. Further comment is still welcome.

This site is also excellent, once you own some, for it gives the
curent bid/ask pricing and inflation markup on all outstanding
issues:

Treasury Inflation-Protected Securities (TIPS) - Markets Data Center - WSJ.com

Gearhead Jim · 01-30-2008, 12:45 PM

Maurice-
Thanks for the comments

JohnEyles-
I'll bookmark that one too, thanks.

LOL! · 01-30-2008, 12:51 PM

I can't figure out numbers, but I can figure out a graph. So I like this link that was first posted by someone else:

St. Louis Fed: Series: DFII10, 10-Year Treasury Inflation-Indexed Security, Constant Maturity

Gearhead Jim · 01-30-2008, 12:58 PM

'nuther bookmark. I'm kicking myself for getting too busy at my post-retirement job and not noticing the TIPS rates last summer.

01-29-2008, 05:12 PM	#1
Gearhead Jim Recycles dryer sheets Join Date: Aug 2005 Posts: 207	Where to find current TIPS rates? Right now, I don't have any TIPS. When the interest rate gets to around 2.5%, then I'll start to stock up. But where can I find today's rates for TIPS? Treasury Direct will tell me the rates at the previous auctions, but not what the current yield is in the secondary market. There's gotta be a website, right? Or should I disregard the secondary market and just wait for the auctions? But how do I know if the auction rates make them attractive, until after the auction? A TIPS bond fund would be convenient, but I'm thinking there is a continual reinvestment rate risk that can be avoided by just buying the bonds themselves. I'm kicking myself for not buying a bunch when the rates were up in 2007. Further advice or information?

01-30-2008, 04:31 AM	#6
Maurice Recycles dryer sheets Join Date: Oct 2007 Location: New York Posts: 391	Jim - a couple of comments - the rates on Bloomberg the day before the auction closes are a reasonably good predictor of the auction results. However, it is a real live (dutch) auction, so the rates aren't exactly what you see in the 2ndary market the day before. As people point out the yields on TIPs are low right now. Its far from clear if and when they'll move back up though - its certainly possible that the market has experienced a fundamental shift in inflation expectations that could last for some time. I participated in last weeks auction of 20yrs, and will continue to do so annually. I'm trying to build my own inflation-protected annuity of sorts. I am 39 1/2, so am exactly 20 years away from being able to withdraw from my IRA without penalty. My intention is to buy enough TIPs every year to give me ~60k a year in income (in 2008 dollars) starting when I'm 59 1/2. I figure some years I'll be buying in favorable TIPS markets, in other years less so. But for me this is part of a larger plan so I'm not worrying too much about timing. Re auction vs. secondary - in my experience the 2ndary market for retail investors sucks, but I admit I haven't done too much research lately. You can participate in treasury auctions for free at treasurydirect, or for a nominal fee or even free at some brokers. Fido for example doesn't charge for treasury auctions (although they rape you if you want to buy a vanguard fund). My IRA is through etrade, where the auctions cost me $40. Re funds vs. individual bonds, there's plenty written on that here and the TIPS angle probably doesn't change the arguments on either side. For me it makes sense to buy the bonds directly, given my larger plan. Basically, over the next 20 years I'll be building a portfolio of around 1M face in TIPS, and its only going to cost me $40 per year (assuming etrade's auction fee remains constant). Clearly thats far less than a fund will cost me. __________________ Money's just something you need in case you don't die tomorrow.

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01-29-2008, 06:33 PM	#3
Gearhead Jim Recycles dryer sheets Join Date: Aug 2005 Posts: 207	Thanks. Further comment is still welcome.

01-30-2008, 12:45 PM	#8
Gearhead Jim Recycles dryer sheets Join Date: Aug 2005 Posts: 207	Maurice- Thanks for the comments JohnEyles- I'll bookmark that one too, thanks.

01-30-2008, 12:51 PM	#9
LOL! Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 2,298	I can't figure out numbers, but I can figure out a graph. So I like this link that was first posted by someone else: St. Louis Fed: Series: DFII10, 10-Year Treasury Inflation-Indexed Security, Constant Maturity

01-30-2008, 12:58 PM	#10
Gearhead Jim Recycles dryer sheets Join Date: Aug 2005 Posts: 207	'nuther bookmark. I'm kicking myself for getting too busy at my post-retirement job and not noticing the TIPS rates last summer.

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